The 3 Simple Rules of Managing Top Talent

Executive Summary

The general view in business is that top-end talent is highly sensitive to and motivated by compensation and that big monetary rewards are key to their management. But in reality, the motives of most top-end talent are not solely financial. Consider three guidelines for managing top-end talent. First, treat star employees as individuals, not as members of a class. They want to know that you care about and support them, so avoid giving the impression that you value them only for their high-quality work. Recognize each employee’s uniqueness. The next guideline is to provide opportunity continuously. Top talents want to take on big challenges and will go elsewhere if they have to wait for opportunities to be available at your organization. Offer your best employees chances to keep growing and learning, but recognize this responsibility goes hand-in-hand with finding ways for all your team members to achieve. Finally, don’t assume that intrinsically motivated workers don’t need your praise. Offer regular accolades and assurance. Although these three rules sound fairly simple, they can be hard to follow because organizations tend to treat everyone the same.

The general view in business is that top-end talent is highly sensitive to and motivated by compensation and that big monetary rewards are key to their management. There is a grain of truth to this — but only a grain. In my 36-year career, I haven’t met a single person truly at the top end of the talent distribution who is highly motivated by compensation. Not one.

Sure, I’ve met lots of successful people who are highly motivated by compensation: CEOs who pump up the perceived value of their company to sell it, hedge fund managers who destroy companies for short-term gain, investment bankers who get their clients to acquire companies they shouldn’t to earn big fees, consultants who sell their clients work that they don’t need, and me-first athletes who poison their teams.

But none are the kind of top-end talent who make their organization great for a sustained period.

During my 15 years of managing talent as dean of the Rotman School of Management, and previously as cohead of Monitor, I have managed some of the best and brightest in professorial talent and the strategy consulting industry worldwide. Over this combined quarter-century of experience, I developed three rules for managing top-end talent.

Treat Them as Individuals, Not as Members of a Class

I learned this one by making a mistake. A top consultant, one of the firm’s 15 or so global account managers, approached me to ask for paternity leave (a benefit that’s now fairly standard, but 20-odd years ago was rare). I readily replied, “Sure. You’re a GAM. At your level, you can do pretty much whatever you want.” He said “OK” and walked off, looking sullen. I was taken aback: He had asked for something, and I had given it to him. What was his problem?

It finally dawned on me that top-end talent doesn’t want to be treated as a member of a class — even if it is an exalted class. They want to be treated as individuals. This consultant wanted to hear: “We care about you and what you need. If paternity leave is the thing that is particularly important to you, we support you 100%.”

The result would have been the same — unfettered paternity leave — but with a totally different end result. Rather than being treated as a generic member of a particular class, he would have been treated in an individualized fashion.

Since that incident, I have watched this phenomenon over and over. Each member of the top-end talent class spends their life striving to be unique. It is discordant with them at a very deep level if you treat them any other way. And, conversely, it makes them warm inside every time they are treated as a unique, valuable individual.

Provide Opportunity Continuously

The biggest enemy for top-end talent is blocked opportunity, especially on the way up. If they are motivated to become top talent, they want to take on big challenges — and the sooner, the better. If they are blocked and made to wait for opportunity to be available, they will simply go somewhere else.

This is, of course, something to handle very carefully. They may blame you if you allow them to bite off too much and they fail. But managing top-end talent requires leaning aggressively into giving them as many opportunities as you reasonably can. The way to win their loyalty is to be the provider of opportunities that enable them to keep growing and learning.

Sometimes this means battling the HR function, which tends to want to treat people homogenously and limit opportunities to rigid time frames. You have to both insist on the desired outcome and take personal responsibility for it to make these first two happen. I recall getting intense pushback from the head of allocations when I wanted to assign a less-seasoned consultant to a senior role on a major case. I was told he wasn’t ready and that it wasn’t fair to others who were more senior. I offered to look for opportunities on other future cases for those I bypassed on this one and promised to take full responsibility for cleaning up any mess that would derive from giving the senior role to the consultant. Fortunately, it worked out well, and catapulted the young consultant into a position that eliminated all such questions about his readiness going forward.

Give Pats on the Back

I see a lot of managers making big mistakes on this front. Because top-end talent is highly driven and intrinsically motivated, their managers can mistake them for being indifferent to praise. It is just the opposite. Talented people spend all their time doing really hard things. To do what they do, they have to flirt regularly with — and actually experience — failure. For this reason, they need regular pats on the back. Otherwise, they become resentful or sad and drift away from the organization.

In my experience, top-end talent rarely, if ever, asks for praise — at least not directly. So the top-end talent manager has to intuit when they need it. But it has to be done in a fashion consistent with the first two rules: It has to be individualized. The generic year-end praise will be a negative, not a positive. And tying the praise to the opportunity that has been taken on and successfully completed is what will make it most effective.

These three rules, although sounding pretty simple, can be hard to follow. That is because most organizations, and many of the managers in them, tend to default to reliability over validity. That is, they favor a consistent, replicable outcome (like similar treatment, opportunities, and praise for all) over an outcome that optimizes their desired intent. At first blush, it seems that reliability is safer than validity, since the latter requires more judgment calls. But reliability is just an alluring siren call; the skilled top-end talent manager knows to avoid it. To the extent that you rely on top-end talent to produce outstanding organizational performance, you must treat your best people as individuals, find ways to give them opportunities even when bureaucracy gets in your way, and shower them with praise when they succeed.